The Australian dollar (sign: $; code: AUD) is the currency of the Commonwealth of Australia, including Christmas Island, Cocos (Keeling) Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu. Within Australia it is almost always abbreviated with the dollar sign ($), with A$ sometimes used to distinguish it from other dollar-denominated currencies. It is subdivided into 100 cents.
The Australian dollar is, as of 2012, the third-most-traded currency in the world. In 2010 it was the fifth-most-traded currency in the world foreign exchange markets behind the US dollar, the euro, the yen and the pound sterling. The Australian dollar is popular with currency traders, because of the comparatively high interest rates in Australia, the relative freedom of the foreign exchange market from government intervention, the general stability of Australia’s economy and political system, and the prevailing view that the Australian dollar offers diversification benefits in a portfolio containing the major world currencies, especially because of its greater exposure to Asian economies and the commodities cycle. The currency is commonly referred to by foreign-exchange traders as the “Aussie.”
Design and Denominations
Australia was the first country in the world to have a complete system of bank notes made from plastic (polymer). These notes provide much greater security against counterfeiting. They also last four times as long as conventional paper (fibrous) notes. The polymer notes are cleaner than paper notes and easily recyclable.
Australia’s currency comprises coins of 5, 10, 20 and 50 cent and one and two dollar denominations; and notes of 5, 10, 20, 50 and 100 dollar denominations.
Many forms of currency were used in the Australian colonies after the arrival of the first European settlers in 1788. In the rough early conditions barter was necessary, and payment in commodities like rum sometimes replaced money in transactions. Some of the first official notes used in Australia were Police Fund Notes, issued by the Bank of New South Wales in 1816.
After federation in 1901, when Australia became an independent nation, the federal government became responsible for the currency. The Australian Bank Notes Act was passed in 1910. In 1913 the first series of Australian notes was issued, based on the old British system of 12 pence to a shilling, 20 shillings to a pound.
In 1963, Australia initiated the change to decimal currency. More than 1000 submissions were made about the name of the new currency unit. The Prime Minister of the day, Sir Robert Menzies, proposed the ‘royal’. The ‘dollar’ was eventually chosen as the name, and decimal currency was introduced on 14 February 1966.
Shortly after the changeover, substantial counterfeiting of $10 notes was detected. This provided an impetus for the Reserve Bank of Australia to develop new note technologies jointly with the Commonwealth Scientific and Industrial Research Organisation.
The revolutionary polymer notes were first introduced in 1988 with the issue of a commemorative $10 note, marking Australia’s bicentenary by featuring the theme of settlement. The note depicted on one side a young Aborigine in body paint, with other elements of Aboriginal culture. On the reverse side was the ship Supply from the First Fleet, with a background of Sydney Cove, as well as a group of people to illustrate the diverse backgrounds from which Australia has evolved over 200 years.
- The $100 note features world-renowned soprano Dame Nellie Melba (1861–1931), and the distinguished soldier, engineer and administrator General Sir John Monash (1865–1931).
- The $50 note features Aboriginal writer and inventor David Unaipon (1872–1967), and Australia’s first female parliamentarian, Edith Cowan (1861–1932).
- The $20 note features the founder of the world’s first aerial medical service (the Royal Flying Doctor Service of Australia), the Reverend John Flynn (1880–1951), and Mary Reibey (1777–1855), who arrived in Australia as a convict in 1792 and went on to become a successful shipping magnate and philanthropist.
- The $10 note features the poets AB “Banjo” Paterson (1864–1941) and Dame Mary Gilmore (1865–1962). This note incorporates micro-printed excerpts of Paterson’s and Gilmore’s work.
- The $5 note features Her Majesty Queen Elizabeth II and Parliament House, Canberra, the national capital. (Note that a special centenary issue of the $5 note featured Sir Henry Parkes and Catherine Helen Spence in 2001.)
Polymer note technology was developed by Australia, and Australia prints polymer banknotes for a number of other countries. In 1988, Australia introduced its first polymer bank note and in 1996, Australia became the first country in the world to have a complete series of polymer notes. Australia’s notes are printed by Note Printing Australia, a wholly owned subsidiary of the Reserve Bank of Australia. Note Printing Australia prints polymer notes for a growing number of other countries including Bangladesh, Brunei, Chile, Indonesia, Kuwait, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Western Samoa, Singapore, Solomon Islands, Sri Lanka, Thailand and Vietnam. Many other countries are showing a strong interest in the new technology.
AUSTRALIAN BANKNOTES (SUBLIMINALS)
First Published: Aug 6, 2012 – Last Updated: Jan 13, 2013